Given gold’s bullish performance in 2023 and in 2024, many investors have turned to the metal to stabilize their portfolios and mitigate the devastating effects of inflation and global turmoil. The yellow metal has long been considered a safe haven.
The real opportunity may not be in physical gold itself or the ETFs tracking it but undervalued gold mining companies that have yet to catch up to the price of bullion!
U.S. Gold Corp has received yet another BULLIsh price target. This time from Paradigm Capital and for $16.50!
“We have forecast the future production of the CK Gold Project using the basic metrics (size/scope) in the December 2021 PFS but adjusted capex and operating costs to reflect current market conditions and arrive at a compelling project with an IRR of over 50% at US$2,600/oz gold. After allowing for future equity dilution for the development capex and giving some upside for the aggregate potential (as detailed in the Valuation section), we are initiating coverage of U.S. Gold with a Speculative Buy rating and US$16.50 target price.”
Paradigm Capital
You can read the research report HERE.
USAU also boasts the following price targets from other esteemed analysts:
Notable Canadian resource sector investor, Eric Sprott, Terra Capital Natural Resources Fund (Australia), and others that are holding long positions in the gold mining sector, have joined USAU’s long-term investors!
A self-proclaimed gold bull, Eric Sprott is a multi-billionaire that holds a significant portion of his assets in gold and silver. He is renowned for his expertise in precious metals, particularly gold, and he sees the potential of USAU!
Mr. Luke Norman, Chairman of the board of directors of U.S. Gold said, "We are gratified by the continued support from our long-standing investors along with the addition of some key resource sector investors who acknowledge the CK Gold Project opportunity. At a time when there are very few permitted projects in the pipeline ready to meet the growing demand for gold and copper production, we believe the importance of what the U.S. Gold team has accomplished is finally becoming recognized. Continued validation of our efforts, by way of investment from the caliber of investors such as Eric Sprott, Terra Capital, Phoenix Gold and all the other investors, should help to continue to increase our exposure internationally and domestically as we move this exciting project forward and continue to create value for our shareholders.”
As a hedge against volatility, gold exploration companies provide a way for investors to gain access to the gold market without investing directly in physical gold which today is at a staggering $2,700+ an ounce.
A VanEck report highlighted that gold prices directly influence the performance of gold stocks, underscoring the correlation between the two: "Gold stocks are supposed to outperform the metal when gold’s price rises. Their leverage to gold justifies outperformance. For any given move in the price of gold, the operating cash flow generated by these companies increases (or decreases) by a much greater percentage. Take Alamos (8.06% of Fund net assets), for example. The company estimates that a 5% increase in the price of gold (about a+$100/oz move), would translate into an increase of almost 30% in their free cash flow in 2024."
The VanEck report noted a recent disconnect between gold prices and gold stocks in the past two years, primarily due to central bank buying and other temporary factors.
“There is no question that the gold mining equities are undervalued. With fuel and energy costs remaining largely stagnant, the profit margins for the producers are skyrocketing. Alternatively, the producers are out looking for "replacement" ounces for their constantly dwindling mineral inventories. As such, money and investment traditionally pour into the developers and explorers. This cycle has barely begun. Capital inflows from generalists, and ultimately the long gold funds, have barely begun. The cycle will result in massive shifts in the mining equities' valuation metrics, bringing them closer to traditional norms in the industry-and like all good bull markets, well beyond.”
US Gold Corp Chairman and Co-Founder, Luke Norman
The ongoing bull market in gold is expected to continue, with experts like Chris Gaffney predicting prices could reach $3,000 per ounce. Gaffney, president of world markets at EverBank, correctly predicted the price of gold would exceed $2,450 back in June.
Higher gold prices over the next several months is great news for gold investors.
As the price of gold rises, gold mining companies see increased margins as well as the ability to expand operations. One company in a strong position to take advantage of this bull market is USAU!
U.S. Gold Corp. (NASDAQ: USAU) is an emerging gold and copper exploration and development company positioned to benefit from the ongoing bull market in gold.
With a focus on shovel-ready projects and a strategic location in a mining-friendly jurisdiction, U.S. Gold Corp aims to capitalize on rising gold prices. The company generates revenue primarily through the development of its mineral assets, particularly the CK Gold Project in Wyoming.
This project is one of the few permitted and shovel-ready gold and copper endeavors in North America, allowing for a streamlined path to production!
The company’s Keystone project in Nevada is very unique. It is a standalone district-scale project, located near Barrick's flagship Cortez complex. It has very similar geology and stratigraphy to its neighbor, Cortez. It is USAU’s belief that a number of significant gold deposits are hosted at Keystone, and it is eagerly awaiting market conditions to improve so that we can explore Keystone with the level of interest that it deserves. It is a company maker in its own right.
U.S. Gold Corp plans to leverage its gold and copper reserves to maximize profit margins. With rising gold prices and stable energy costs, the company stands to benefit significantly as market conditions favor gold mining operations.
CK Gold Project – Near-Term Gold - Copper Producer
The CK Gold Project deposit is a development stage, large-tonnage, gold-copper deposit with high-grade mineralization exposed at the surface surrounded by a large, low-grade zone with potential for expanding resources.
The CK Gold Project was reportedly discovered in 1881, high-graded and saw limited mining. The first exploration work reported is drilling by ASARCO in 1938. Several additional rounds of drilling have been conducted since that time. In 1972 Henrietta Mines Ltd. acquired the property and completed a comprehensive program of exploration and development. In addition to drilling, an I.P. survey, geologic mapping, geochemical sampling, and metallurgical testing were conducted (Nevin, 1973). Drilling campaigns were conducted by Saratoga since 2006 and Strathmore since 2012, with a hiatus in drill exploration until the acquisition of the project by U.S. Gold Corp. from Energy Fuels in 2014. U.S. Gold Corp. conducted drilling in 2017, 2018, 2020 and is currently concluding its 2021 drilling program, focused on data collection to support post PFS and feasibility studies in 2022.
The CK Gold Project property is located in the Silver Crown mining district of southeast Wyoming, approximately 20 miles west of the city of Cheyenne, on the southeastern margin of the Laramie Range. The property comprises about 1,120 acres (2 square miles) and is 100% owned by U.S. Gold Corp. (NASDAQ: USAU).
In December 2021, the company released the project's SK-1300 Technical Report Preliminary Feasibility Study, PFS (by Gustavson Associates LLC). The project offers the company near-term, open-pit production potential as well as compelling value.
Highlights:
*Source:SK-1300 TechnicalReport Pre-FeasibilityStudy on the CK Gold Project report date December 1, 2021 using $1625 Au, $3.25 Cu and $18 Ag. Please see “CautionaryNote ConcerningMineral Resources”in this presentation
Prefeasibility Study Highlights of Ck Gold also include a staggering copper amount:
Why is this a big deal?
Because copper will be a big part of the clean revolution.
Besides clean energy technologies, several industries including construction, infrastructure, and defense use copper for its unique properties. The metal is critical in many fast-growing clean industries from the electric grid and electric vehicles to renewable technologies.
Copper is essential in electrical wiring and transportation and is playing an increasingly large role in alternative energy, as it is a crucial component in wind turbines, solar panels, and electric vehicles, which require four times as much copper as conventional gas vehicles!
Some of the world's largest mining companies and metal traders are warning that by 2025, a massive shortfall will emerge for copper, which is now the world's most critical metal due to its essential role in the green economy.
The deficit will be so large that The Financial Post stated that it could itself hold back global growth, stoke inflation by raising manufacturing costs and throw global climate goals off course.
The copper supply issue is scary. There may not be enough copper to go around for the millions of electric vehicles (EVs) expected to hit the roads, or to fuel wind turbines and solar power.
In fact, wind and solar energy use more copper than conventional forms of energy, such as coal, natural gas, and nuclear power plants. Conventional power plants require about one ton of copper to produced one megawatt of electricity, whereas wind and solar can require between three to five tons per megawatt!
To make matters worse, these numbers only reflect the amount of copper needed to build wind turbines or solar panels, and do not factor in the additional copper needed to transport the electricity generated from wind and solar facilities to the population centers that consume the electricity.
All these activities are planned to occur during 2025 and development, subject to suitable financing, could commence as soon as year-end 2025.
"We have purposely kept the project simple providing an expedited pathway to project approval and what we consider to be a low-risk venture in a stable jurisdiction using conventional technology. There are also significant areas of upside and opportunity building upon what we believe is already a robust copper and gold project. The focus for now is advancing toward development, highlighting the potential of additional opportunities and securing the best terms possible for project financing that will protect the investment made by our shareholders."
George Bee, Director, President and C.E.O of U.S. Gold
While the CK Gold Project in Wyoming remains the primary focus, the Company's exploration assets are undergoing data-analysis and low-cost exploration efforts until separate avenues of funding can be obtained.
Next to Wyoming, Idaho and Nevada also offer compelling opportunities…
Discovering the next major gold opportunity on the Cortez Trend in Nevada!
U.S. Gold Corp. Provides Update on Engineering Optimization Studies for CK Gold Project
Luke Norman, Executive Chairman of U.S. Gold, stated, "The CK Gold Project continues to advance with the major permitting almost complete. The U.S. Gold team is finalizing updates to project economic forecasts, taking into consideration updates to pricing on both the cost and revenue sides of the equation. An ideally located, fully permitted gold and copper project positioned to leverage rising commodity prices is anticipated to be immensely accretive for our investors. As significant shareholders of the Company, we are committed to forging the pathway to project financing without undue dilution to our fellow shareholders."
This promising gold exploration and development company has several projects in the United States holding a 100% interest in the CK Gold project in Wyoming, the Keystone project in Nevada, and the Challis Gold project in Idaho.
USAU is advancing its high-potential projects in Wyoming, as well as Nevada, and Idaho, with a seasoned team. Exploration efforts combine deep experience with state-of-the-art leading-edge technology to help the company drive toward exploration success.
Gold has crossed the $2,700 mark and the rally could be far from over. Gold itself can be complicated and expensive to buy, but gold-related stocks can offer unprecedented value as investors wonder how to add the precious metal to their portfolio.
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